Up until the late eighteenth century, the Governorship of the River Plate was largely overlooked by the Spanish Crown. Considered a remote and unproductive outpost of the empire, it had no mineral resources and no pliant indigenous populations. Direct trade with Spain from the River Plate was prohibited from 1554, and all imported and exported goods were meant to be traded via Lima, which restricted growth of the port, but encouraged contraband of cheap imported manufactured items. The governorship's agricultural potential was limited: there was no market in Europe at the time for agricultural produce, and indigenous populations were relatively scattered and independently minded, so could not easily be yoked into the encomienda system of forced labour. Encomienda entailed the granting of land and custody of Amerindian populations to Spanish conquistadors and settlers. These encomenderos were, theoretically, responsible for the conversion and spiritual education of their native workforce in return for labour, but the system was openly abused and many encomenderos , concerned more with exploitation than evangelization, often treated their workforce no better than slaves.

More important than the River Plate at this period was the Governorship of Tucumán. The encomienda system was more effective here and in the central Córdoban sierras, as they were more densely settled. Though some trade from this area was directed towards Buenos Aires, the local economy was run so as to ensure that the all-important Potosí mine was provided with mules, sugar, cotton textiles and wheat.

More ruinous perhaps than the encomienda was the mita , originally an indigenous system of tribute labour used by the Incas for projects such as building roads, bridges and agricultural terracing. It was adopted and extended by the Spanish as the preferred system of labour for the mining industry and obliged indigenous peoples of the northwest and Upper Peru to toil for periods of the year in the silver mines of Potosí - a brutal undertaking that all too often led to deaths through malnutrition, mercury poisoning, psilicosis or rockfalls. Other tribute systems involved the entire relocation of communities to the agricultural areas of the northwest, to compensate for the demographic collapse caused by tribute labour and European diseases like smallpox. Indigenous resistance to the impositions of Spanish colonial society still erupted on occasion, as with the Diaguita rebellion of 1657, under the leadership of a Spanish rebel, Pedro Bohórquez. The rebellion was brutally crushed in 1659 and survivors were displaced from their decimated communities to be forcibly resettled on hacienda farms as a workforce.

By the second half of the eighteenth century demand for labour from both Potosí and the towns of Tucumán led to the importation of black slave labour . By 1778, it is estimated that around nine percent of Tucumán's regional population of 126,000 consisted of slaves, while well over a quarter were of pure indigenous blood. Racial divisions were strongly demar cated, and the rights of whites to control the best lands and political offices were reinforced by a dress code and a weapon ban for the non-white castes.

The economies of Buenos Aires, Santa Fé, Entre Ríos and Corrientes were not free from strife with nomadic native peoples either. Mounted raids by Chaqueñan indigenous tribes like the Abipone terrorized the littoral provinces well into the eighteenth century; whereas Buenos Aires, dependent on its round-ups of wild cattle ( vaquerías ) for its hide and tallow industry , frequently came into conflict both with Pampas groups of Tehuelches and, increasingly from the eighteenth century, Mapuche groups (Araucanians). These peoples relied on the same feral cattle and horses, driving vast herds of them to the northern Patagonian Andes for the purpose of trading with Chileans, both white settlers and other indigenous groups. The seventeenth and eighteenth centuries saw the emergence and apogee of the gaucho . These were nomadic horsemen, all too often of mestizo stock (mixed indigenous and criollo or black descent), who roamed in small bands and lived off the wild herds of livestock that roamed the plains. They were viewed as social outcasts, a motley collection that included vagrants, army deserters, fugitive criminals and escaped slaves. Their lives often involved incredible physical hardship but, nevertheless, in the late nineteenth century, they came to represent the same quintessential, romantic ideal of carefree liberty and freedom from authority as their North American counterpart, the "cowboy". This perception came about only when the state was extending its control over territory it claimed and the lives of those who lived there. The days of the true gauchos were already numbered by this time, but the image still exerts a powerful hold on modern Argentinian society and the popular imagination.

The seventeenth and eighteenth centuries also saw a developing feud between Spain and Portugal, focusing primarily on the River Plate region. Tension escalated after the Portuguese, in 1680, founded the town of Colonia da Sacramento on the Banda Oriental - the "east bank" of the Plate, in what is now Uruguay. Colonia became an entrepôt of contraband trade with Buenos Aires, and this encouraged increased traffic in illicit silver from Potosí. Violent struggles ensued between Spain and Portugal over control of Colonia, which changed hands several times in the eighteenth century. Spanish authorities were determined not to cede control of the River Plate and access to the Paraná. Settlements were established in other areas of the Banda Oriental to rival Colonia, the most important of which was Montevideo , founded in 1724. The wars were only settled in 1777 by the Treaty of Ildefonso, in which the entire Banda Oriental territory was ceded to the Spanish.